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Caring for previously hospitalized consumers : progress and challenges in mental health system reform : final report to the Joint Legislative Program Evaluation Oversight Committee

Mental Health System Services Report No. 2008- 12- 04
Page 4 of 23
most extreme cases who were best cared for in a more restrictive
environment for longer periods of time.
Under reform, changes were made to the way local services were
provided. Area Programs, which had been service providers, were
transformed into Local Management Entities ( LMEs), and local service
delivery was transferred to private service providers. LMEs were charged
with overseeing and developing community- based services delivered by
private providers within their catchment area.
Implementation challenges compromised system change. As documented
in the 2008 Program Evaluation Division process evaluation report, the new
services introduced in 2006 as a part of system reform marked another
chapter in a history of challenges in mental health care in North Carolina. A
lack of strategic planning and data systems contributed to cost overruns,
poor system management, overuse of some services ( e. g., community
supports), and a scarcity of others ( e. g., crisis). The confluence of rushed
implementation, relaxed provider endorsement and service authorization
requirements, and a lapse in accountability contributed to an explosion of
low- intensity community support services. MHDDSAS scrambled to come to
grips with and resolve the situation, while members of the General
Assembly asked for greater accountability and better reporting and
requested that the Program Evaluation Division evaluate the system. 5
This evaluation focused on consumers who pose potentially significant
costs to the system— those who have been previously hospitalized.
Whereas recent measures implemented by MHDDSAS are addressing
overuse of community support services, 6 more needs to be known about
services for previously hospitalized consumers. 7 Although they comprise a
relatively small proportion of those served ( according to the MHDDSAS
2007 annual report, 24,760 consumers, or 8% of all consumers, were
hospitalized in state facilities), individuals who have been hospitalized pose
potentially significant costs to the system. A study of North Carolina
consumers with a history of three or more hospitalizations over a one- year
period revealed an average cost of $ 10,809 for each adult with mental
illness for services received in Fiscal Year 2006- 07 in addition to
hospitalization. The average cost for children who met this criterion was
over three times higher, at $ 38,731.
Recent reports of serious failures in state hospitals8 have further
heightened concern about caring for high- need consumers.
Understanding patterns of services received by previously hospitalized
consumers is critical to strategic planning and efficient use of available
5 Unfortunately, the problems that have attracted much attention and distress in North Carolina are mirrored in national trends: failures
to cope with deinstitutionalization due to inadequate planning and a shortage of community- based services have been cited for
decades.
6 Session Law 2007- 323, House Bill 1473, Section 10.49.( ee); see monthly reports on community support services to the Senate
Appropriations Committee on Health and Human Services and the Joint Legislative Oversight Committee on Mental Health,
Developmental Disabilities and Substance Abuse Services ( available at http:// www. ncdhhs. gov/ mhddsas/ statspublications/ reports).
7 In keeping with current practice in the field, “ consumers” will be used throughout this report to refer to MHDDSAS service recipients.
8 e. g., Compass Group, Inc. ( October, 2008). Organizational assessment and recommendations: Cherry Hospital. See also The Joint
Commission Report on Broughton: 12/ 11/ 2007 – 12/ 13/ 2007 ( available at http:// www. dhhs. state. nc. us/ mhfacilities/ broughton
/ index. htm).

Mental Health System Services Report No. 2008- 12- 04
Page 4 of 23
most extreme cases who were best cared for in a more restrictive
environment for longer periods of time.
Under reform, changes were made to the way local services were
provided. Area Programs, which had been service providers, were
transformed into Local Management Entities ( LMEs), and local service
delivery was transferred to private service providers. LMEs were charged
with overseeing and developing community- based services delivered by
private providers within their catchment area.
Implementation challenges compromised system change. As documented
in the 2008 Program Evaluation Division process evaluation report, the new
services introduced in 2006 as a part of system reform marked another
chapter in a history of challenges in mental health care in North Carolina. A
lack of strategic planning and data systems contributed to cost overruns,
poor system management, overuse of some services ( e. g., community
supports), and a scarcity of others ( e. g., crisis). The confluence of rushed
implementation, relaxed provider endorsement and service authorization
requirements, and a lapse in accountability contributed to an explosion of
low- intensity community support services. MHDDSAS scrambled to come to
grips with and resolve the situation, while members of the General
Assembly asked for greater accountability and better reporting and
requested that the Program Evaluation Division evaluate the system. 5
This evaluation focused on consumers who pose potentially significant
costs to the system— those who have been previously hospitalized.
Whereas recent measures implemented by MHDDSAS are addressing
overuse of community support services, 6 more needs to be known about
services for previously hospitalized consumers. 7 Although they comprise a
relatively small proportion of those served ( according to the MHDDSAS
2007 annual report, 24,760 consumers, or 8% of all consumers, were
hospitalized in state facilities), individuals who have been hospitalized pose
potentially significant costs to the system. A study of North Carolina
consumers with a history of three or more hospitalizations over a one- year
period revealed an average cost of $ 10,809 for each adult with mental
illness for services received in Fiscal Year 2006- 07 in addition to
hospitalization. The average cost for children who met this criterion was
over three times higher, at $ 38,731.
Recent reports of serious failures in state hospitals8 have further
heightened concern about caring for high- need consumers.
Understanding patterns of services received by previously hospitalized
consumers is critical to strategic planning and efficient use of available
5 Unfortunately, the problems that have attracted much attention and distress in North Carolina are mirrored in national trends: failures
to cope with deinstitutionalization due to inadequate planning and a shortage of community- based services have been cited for
decades.
6 Session Law 2007- 323, House Bill 1473, Section 10.49.( ee); see monthly reports on community support services to the Senate
Appropriations Committee on Health and Human Services and the Joint Legislative Oversight Committee on Mental Health,
Developmental Disabilities and Substance Abuse Services ( available at http:// www. ncdhhs. gov/ mhddsas/ statspublications/ reports).
7 In keeping with current practice in the field, “ consumers” will be used throughout this report to refer to MHDDSAS service recipients.
8 e. g., Compass Group, Inc. ( October, 2008). Organizational assessment and recommendations: Cherry Hospital. See also The Joint
Commission Report on Broughton: 12/ 11/ 2007 – 12/ 13/ 2007 ( available at http:// www. dhhs. state. nc. us/ mhfacilities/ broughton
/ index. htm).